Central and Eastern Europe private equity funding hits decade high

Private equity fundraising in Central and Eastern Europe (CEE) hit a ten-year-high in 2018 despite investment into companies in the region decreasing.

The amount of money invested by private equity in the region fell by nearly a quarter to €2.7 billion throughout the year.

This was the second highest figure achieved, however, following 2017’s record €3.5 billion of investment, according to the latest data from private equity association Invest Europe.

Private equity fundraising reached €1.8 billion in 2018, the highest annual level in a decade, the report found.

Buyout funds in the region raised a total of €1.1 billion, whilst CEE venture capital funds attracted over €500 million of investor cash for the second year in a row.

“Global investors see that private equity and venture capital investment is one of the best ways to access the region’s robust markets and high-growth companies,” said Robert Manz, chair of Invest Europe’s Central and Eastern Europe branch.

Despite a fall in the amount of private equity invested in CEE companies, the number of companies backed increased by 50% year-on-year to almost 400.

According to Invest Europe, this was primarily driven by a sharp increase in CEE companies supported by venture capital.

The number of private equity and venture capital-backed exits in CEE reached an all-time high with a total of 128 companies divested in 2018. This represented a total value of over €1 billion for the fifth year running, measured at historical investment cost, the report said.

With an exit value of €575 million, Poland accounted for nearly half of all exit activity.

Poland also saw the region’s highest amount of private equity investment with its companies receiving €850 million last year. The Czech Republic came next with €767 million invested into its companies via private equity and venture capital funds.

“The strong levels of private equity fundraising, investment and exit activity in Central and Eastern Europe in 2018 demonstrate that the region continues to develop as an attractive investment destination,” Manz said.

The biotech and healthcare sector took the lion’s share of CEE private equity investment, making up just over 30% of the total value for the year. Consumer goods and services companies also faired well, receiving 27% of the overall funding.

©2019 funds europe

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